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The following transactions occurred during 2021 for the Beehive Honey Corporation:

Feb. 1 Borrowed $24,000 from a bank and signed a note. Principal and interest at 8% will be paid on January 31, 2022.
Apr. 1 Paid $6,000 to an insurance company for a two-year fire insurance policy.
July 17 Purchased supplies costing $4,000 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,850 remained on hand.
Nov. 1 A customer borrowed $9,600 and signed a note requiring the customer to pay principal and 6% interest on April 30, 2022.
Required:
1. Record each transaction in general journal form.
2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.

User Timbod
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1 Answer

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Answer:

Given Below

Step-by-step explanation:

Beehive Honey Corporation:

General Journal

Journal Entries

Date Particulars Debit Credit

Feb.1. Cash $ 24,000 Dr.

Notes Payable $ 24,000 Cr.

Feb. 1 Borrowed $24,000 from a bank and signed a note. Principal and interest at 8% will be paid on January 31, 2022.

Apr. 1 Prepaid Insurance 6,000 Dr.

Cash $ 6000 Cr

Apr. 1 Paid $6,000 to an insurance company for a two-year fire insurance policy.

July 17 Supplies Account $ 4000 Dr.

Accounts Payable $ 4000 Cr.

July 17 Purchased supplies costing $4,000 on account. The company records supplies purchased in an asset account.

Nov. 1 Notes Receivable $ 9,600 Dr.

Cash $ 9,600 Cr.

Nov. 1 A customer borrowed $9,600 and signed a note requiring the customer to pay principal and 6% interest on April 30, 2022.

Beehive Honey Corporation:

General Journal

Adjusting Entries December 31st

Sr. No Particulars Debit Credit

1. Interest Expense $ 1600 Dr.

Interest Payable $ 1600 Cr.

Interest accrued from Feb to December. ( $ 24000* 8% * 10/12 = $ 1600)

2. Insurance Expense $ 2250 Dr.

Prepaid Insurance 2250 Cr.

Insurance of $ 2250 expired during April to December. ( $ 3000 *9/12* = $ 2250)

3. Supplies Expense $ 2150 Dr.

Supplies Account $ 2150 Cr.

( $ 4000 - $ 1850= $ 2150)

At the year-end on December 31, 2021, supplies costing $1,850 remained on hand.

4. Interest Receivable $ 192 Dr.

Interest Income $ 192 Cr.

$9,600 * 6% * 2/6= $ 192 Accrued Interest not yet received.

User Adammokan
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